Art investment is a growing industry and individuals with significant art collections need advice on the best tax strategies, says Rosanne McDonnell.
The art and tax worlds, at first glance, appear to be at different ends of the spectrum. Collectors are often known for their passion and genuine love of art. Many purchases are borne out of personal and aesthetic reasons, and affluent collectors typically amass significant collections during their lifetime. However, such collectors often sub-standardly address tax issues surrounding their art collections.
Art has been in the tax news of-late, with high-profile cases such as the Wildenstein fraud throwing taxation issues within the art market into the spotlight. Tax concerns are extremely relevant to collectors, art businesses, financial stakeholders, and cultural institutions who frequently require expert guidance around gift and estate planning, corporate taxation, charitable planning, and import and export considerations.
It has been previously said that the Swiss buy art like the Irish buy property. However, there has been a sea of change in recent years, and with Brexit looming, the Irish and European art market are more attractive than ever. Researcher Anne-Marie Rhodes noted, ‘the [art and business] worlds co-exist and, of necessity, routinely intersect’. As such, succession planning for an art collection, taxation issues, including import and export duties, are all concepts with which senior business professionals in Ireland should familiarise themselves with.
For high-net worth individuals, the smartest strategy is to have the support and guidance of an experienced accounting firm with expertise in the nuances, risks, and rewards of the art market. For accountancy firms based in Ireland, the art market represents an abundance of opportunities in the domestic and international art markets, for tax specialists to advise clients who are both residents and non-residents of Ireland. As Michael Delgass, Managing Director, Sontag Advisory surmised in the New York Times in 2015, ‘Planning for art is very complicated. That’s code for, “there are lots of opportunities.” And there certainly are for business people to correctly advise their clients.
However, dealing with clients who have a collection in art or antiquities requires a specific expertise in order to advise as efficiently as possible in light of the constantly evolving Irish tax regime and the succession planning objectives of the client. The art market, which is often lauded for its lack of transparency, is intrinsically complex.
If you’re interested in hearing about the best strategies for advising your high net worth clients, join us at Europe’s Leading Art Business Conference and Networking event that unites senior business professionals in law, tax and wealth management from around the globe. It offers insights into the international art market to assist business professionals in understanding and advising their high net worth clients in wealth management regarding succession planning for future generations, who have collections in art, antiquities and other rare commodities.
This one day unmissable professional event takes places on the 18th June 2018 in the Luxury setting of the five star Adare Manor hotel.